U.S. stocks fall as 1Q2016 earnings begin to flow In

484

U.S. stocks fell Monday as companies begin to report their 1Q2016 earnings. Analysts see anxiety building up among investors as some companies post a string of disappointing quarterly results.

The major indices initially appeared strong but all reversed course to finish in the red. The Dow industrials in particular gained as many as 155 points early in the day, but couldn’t sustain the momentum, thus giving up all the early gains to end the day on a negative note.

Performance of major indices

The Dow Jones Industrial Average was down 20.55 points or 0.1% to finish the day at 17556.41. Dow finished in the red despite showing amazing strength early in the day.  The S&P 500 also slipped, shedding 5.61 points or declining 0.3% to close the day at 2041.99. The Nasdaq Composite Index was no better as the index shed 17.29 points or 0.4% to end the day at 4833.40.

Earnings for S&P 500 companies predicted to fall

For 1Q2016, analysts see S&P 500 companies posting about 8.5% YoY slump in earnings. Energy stocks are particularly expected to weigh down S&P 500 earnings the most, according to FactSet analysts.

Strong and weak sectors

In Monday’s trading, materials companies were among the S&P 500 gainers. For example, Newmont Mining gained 6.9%. Materials sector rose 0.5%. However, Consumer staples companies declined in the most among S&P 500 companies. Whole Food shed 2.1% and Kroger lost 2.2%.

iPath S&P GSCI Crude Oil Total Return (NYSEARCA:OIL) and gold gain

The weak dollar appeared to help the commodities market as both gold and crude oil prices gained. Gold for April delivery was up 1.1% to $1,256.70 per ounce. The precious metal is expected to continue benefiting from the uncertainty surrounding interest rates adjustments as invest stick to safer stores of value. Crude oil prices jumped 1.6% to $40.36 per barrel, rising above $40 per barrel for the first time in about three weeks.

Analysts see growing hope among investors that major oil producers would cut production to help lift global crude oil prices.

An ad to help with our costs